Estee Lauder 2003 Annual Report Download - page 14

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13
With ten more countries from Central Europe joining the European Union, we see big opportunities for
growth and efficiencies as Pan-European synergies unfold.
PRODUCT INNOVATION
New products are still the lifeblood of this business. Our Research and Development team provides an
i
mportant competitive asset. This year we launched more than 315 new products, many with groundbreaking
results. In particular,we reinforced our strength in skin care, positioned ourselves as innovators in the highly
competitive mascara arena and made great strides in hair and scalp care.
PERFORMANCE IMPROVEMENTS
We are able
to invest aggressively in new ventures, as well as global expansion, because we have managed
our resources wisely. Last year, cost savings from our Global Operations Group helped achieve goals and
fuel profitability. Additional savings were gained through ongoing globalization efforts. Cost of goods as
a percentage of net sales improved 70
basis points over last year and speed-to-market improved dramatically.
FOCUSING ON EMPLOYEES
Once again, the creativity, passion and drive of our employees was a source of inspiration. From the
challenges of geo-political unrest to the threat of SARS, our employees remained shining examples of
composure, commitment and good humor.
I am especially delighted that in January, William P. Lauder became our Chief Operating Officer. William
and I agree that the development and growth of our people is a top priority. He will lead the effort to improve
our training programs and evaluation methods to ensure we attract and retain the very best people.
In addition to leading the Human Resources function, William’s responsibilities as COO include the Inter-
national Division, Operations and our Specialty Brands.
THE FUTURE
Throughout this letter, I have expressed themes you’ve heard before. However, we firmly believe good
strategies never go out of fashion. Our core competencies reinforce a sound strategy, build strong relation-
ships over time and inspire our more than 20,000 colleagues globally.
Though we are steadfast in our strategy and core values,we are open to new ideas, new people and new ways
of looking at the world. One of the great strengths of The Estée Lauder Companies is our ability to combine
trends with traditions.
I want to thank our Chairman, Leonard Lauder, and the entire Board of Directors for guiding us through
another successful, productive and profitable year.
Sincerely,
Fred H. Langhammer
President and Chief Executive Officer